1) Reetz Corporation would like to determine the relative profitability of the company’s
products for purposes of making volume trade-off decisions. For illustration, the
company has provided the following data for product A25H:
What is the profitability index for product A25H?
A.$47,560
B.$29.00 per gram
C.$5.80 per gram
D.0.20
2) When using data from a segmented income statement, the dollar sales for the
company to break even overall is equal to:
A.(Allocated fixed expenses + Traceable fixed expenses) / Overall CM ratio
B.(Traceable fixed expenses + Common fixed expenses) / Overall CM ratio
C.(Non-traceable fixed expenses + Common fixed expenses) / Overall CM ratio
D.(Traceable fixed expenses) / Overall CM ratio
3) A manufacturing company uses a standard costing system in which standard
machine-hours (MHs) is the measure of activity. Data from the company’s flexible
budget for manufacturing overhead are given below:
The following data pertain to operations for the most recent period:
The fixed manufacturing overhead budget variance for the period is closest to:
A.$900 F
B.$452 F
C.$3,734 F
D.$3,450 U
4) Harris Corporation, a retailer, had cost of goods sold of $290,000 last year. The
beginning inventory balance was $26,000 and the ending inventory balance was
$24,000. The corporation’s inventory turnover was closest to:
A.12.08
B.11.60
C.5.80
D.11.15
5) Spirer Corporation manufactures and sells a single product. The company uses units
as the measure of activity in its budgets and performance reports. During September,
the company budgeted for 6,700 units, but its actual level of activity was 6,750 units.
The company has provided the following data concerning the formulas used in its
budgeting and its actual results for September:
Data used in budgeting:
Actual results for September:
The activity variance for direct labor in September would be closest to:
A.$360 U
B.$360 F
C.$880 F
D.$880 U
6) The current ratio at the end of Year 2 is closest to:
A.0.45
B.1.93
C.0.44
D.1.04
7) Munar Corporation uses activity-based costing to compute product margins.
Overhead costs have already been allocated to the company’s three activity cost
pools-Machining, Order Filling, and Other. The costs in those activity cost pools appear
below:
Machining costs are assigned to products using machine-hours (MHs) and Order Filling
costs are assigned to products using the number of orders. The costs in the Other
activity cost pool are not assigned to products. Activity data appear below:
Finally, sales and direct cost data are combined with Machining and Order Filling costs
to determine product margins.
What is the overhead cost assigned to Product X6 under activity-based costing?
A.$13,500
B.$4,698
C.$14,130
D.$18,828
8) Conely Corporation has provided the following data from its activity-based costing
accounting system:
Distribution of Resource Consumption across Activity Cost Pools:
The “Other” activity cost pool consists of the costs of idle capacity and
organization-sustaining costs that are not assigned to products.
How much supervisory wages and salaries and factory supplies cost would NOT be
assigned to products using the activity-based costing system?
A.$0
B.$102,000
C.$180,000
D.$660,000
9) Brandon, Inc. has provided the following data for last year’s operations:
Brandon’s return on investment (ROI) is:
A.6%
B.10%
C.15%
D.24%
10) Cervetti Corporation has two major business segments-East and West. In July, the
East business segment had sales revenues of $220,000, variable expenses of $125,000,
and traceable fixed expenses of $29,000. During the same month, the West business
segment had sales revenues of $890,000, variable expenses of $472,000, and traceable
fixed expenses of $169,000. The common fixed expenses totaled $246,000 and were
allocated as follows: $123,000 to the East business segment and $123,000 to the West
business segment.
A properly constructed segmented income statement in a contribution format would
show that the net operating income of the company as a whole is:
A.$315,000
B.$69,000
C.-$177,000
D.$513,000
11) Longview Hospital performs blood tests in its laboratory. The following standards
have been set for each blood test performed:
During May, the laboratory performed 1,500 blood tests. On May 1 there were no direct
materials (plates) on hand; after a plate is used for a blood test it is discarded. Variable
overhead is assigned to blood tests on the basis of standard direct labor-hours. The
following events occurred during May:
3,600 plates were purchased for $9,540
3,200 plates were used for blood tests
340 actual direct labor-hours were worked at a cost of $5,550
The direct materials purchases variance is computed when the materials are purchased.
The labor rate variance for May is:
A.$225 F
B.$225 U
C.$450 F
D.$450 U
12) Data from Estrin Corporation’s most recent balance sheet and income statement
appear below:
The average sale period for this year is closest to:
A.101 days
B.50 days
C.108 days
D.45 days